PPF Calculation: In today’s world, everyone strives to invest their earnings in a safe place that will yield good returns in the future. Amidst market fluctuations and risky investment options, if any scheme has become a reliable name, it is the Public Provident Fund (PPF). This is a government scheme that offers both security and the benefits of compounding. With regular investments over a long period, even a small amount can become a substantial fund.
PPF is a reliable option for safe investment
The Public Provident Fund is a scheme backed by the Government of India, so there is no risk of loss. It is ideal for investors who are risk-averse and seek stable returns. The 15-year maturity period makes it ideal for long-term goals such as children’s education, marriage, or retirement planning.
Current PPF Interest Rate
According to current rules, PPF accounts earn 7.1 percent annual interest. This interest is compounded every year, meaning interest is earned on interest. This is why the invested amount grows rapidly over time and ultimately results in a strong fund.
How much can a ₹3,000 monthly investment create?
If a person deposits ₹3,000 every month into a PPF account and continues this for 15 years, the total investment over this period will be ₹45,000. At the current interest rate, this amount could grow to over ₹81,000 at maturity. Of this, over ₹36,000 is earned from interest alone, demonstrating the power of regular savings.
How can a monthly saving of ₹5,000 create a substantial corpus?
Investing ₹5,000 every month results in a total deposit of ₹75,000 over 15 years. With interest, this amount can reach around ₹1.35 lakh at maturity. This means you earn a significant additional return on your principal, which can prove helpful in meeting future needs.
Returns on ₹8,000 and ₹10,000 investments
If an investor deposits ₹8,000 per month in PPF, their total investment amount over 15 years is ₹1.20 lakh. After adding interest, the maturity amount can reach approximately ₹2.16 lakh. A monthly investment of ₹10,000 results in a total deposit of ₹1.50 lakh, and a maturity corpus of over ₹2.70 lakh is expected. This demonstrates how robust a fund can become with increased and regular investments.
Tax Savings and the Major Benefit of EEE Status
The most significant feature of PPF is its EEE status. This means that the investment amount, the interest earned, and the maturity amount are all completely tax-free. Furthermore, investments up to ₹1.5 lakh are tax-exempt under Section 80C, reducing the annual tax burden.
Adarsh P
Adarsh Pal is a content writer at Timesbull Media. He specializes in writing news related to industry updates, the automotive sector, banking, telecommunications, the travel sector, and personal finance. Adarsh has previously worked with several digital media channels. He is skilled at presenting news accurately and disseminating information based on...
